Vista Basket Up 16% in 2024!

This post has NO AI.

Beating both "headline" S&P GSCI (+3.7%) and Bloomberg (0.1%) commodity index ETFs, the Vista Basket closed at  $1,222,577.03 up  $183,831.65 on 12/31/2024 up 16% for the year. 

Commodity Index Performance Normalized where 12/31/2023 = 1000

Vista = Vista Commodity Basket

DJP = Ipath Commodity Index TR ETN (Bloomberg Commodity Index)

GSG = S&P GSCI Commodity-Indexed Ishares ETF

Source of split and dividend adjusted closing prices: Barchart.com

Major Commodity ETFs

The Vista Basket is a composed of 15 diversified, fair, long-dated, well-formed, lower volatility commodity futures contracts. DJP is diversified while GSG is a heavily weighted (almost 70%) energy. Both DJP and GSG track the Bloomberg Commodity Index  and S&P GSCI Excess Return Index, respectively, very closely. Both significantly lag Vista in the long and short-term. The fantastic gains in cocoa, coffee and other softs account for Vista's outperformance. USCI is a boutique commodity index based on forward curve shape, i.e. commodities displaying the greatest contango. This has shown superior returns over that last 10 years. 

Vista Commodity Basket Component Returns

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Contact me at gdrahal@outlook.com for more information.

 

Commodities Up 8% in 2024!

This post has no AI.

The S&P GSCI Commodity Index tracking exchange traded fund (ETF) symbol GTG, was up 8% in 2024. The Blomberg Commodity Index tracking ETF symbol DJP rose 5.5%. The DB Commodity Index ETF was down 3.5% in 2024, posting losses two years in a row. These are three of the oldest and largest commodity ETFs in the market.

The normalized perfrmance chart and return table are shown below. Note that GSG leads the other names early in the year and maintained its lead through year-end. 

Commodity Index Value Added Market Index VAMI) where 12/31/2023 = 1000

The S&P GSCI Commodity ETF not only outperformed for the year 2024, GSG  posted a gain for the two-year period while DJP and DBC, especially, marked losses. For the 3 year, GSG gained almost three times the return of the DJP.  While GSG and DJP posted gains in 2024, we can see in the table below, commodities posted mixed returns for the year. 

Individual Commodity Futures Contract 2024 Returns

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Note, while the indexes are computed and based upon commoditiy futures contracts, individual commodities do not necessarily trade as a group. Each commodity has its own supply and demand characteristics which reflect the physical or spot price of the commodity and further the commodity futures contract.  Contact me at gdrahal@vistamktresearch.com for more information.

Bitcoin and GBTC

Bitcoin has the highest historic returns EVER in ANY market. It even eclipses the gains of AAPL, Google and Microsoft. Where does this price appreciation come from? Also, we see widespread adoption of bitcoin by major financial institutions in multiple forms (ETFs, swaps, futures). Does this mean we should invest in Bitcoin and its derivatives?

Below is a chart and table of GBTC and SPY, the largest bitcoin and S&P 500 ETFs since the inception of GBTC in 2015:

Continuously compounded normalized returns.

Continuously compounded annualized rolling returns as of 12/31/2024.

GBTC = Grayscale Bitcoin Trust ETF (Bitcoin)

SPY = S&P 500 SPDR (Stocks)

SPY barely shows up on the chart. GBTC is the world’s oldest and largest (last I looked) bitcoin ETF. There is a slew of new crypto ETFs. While the above returns are out of this world, so are the risks! And standard deviation 5 times greater than SPY does not capture it. There are enormous one day losses GBTC can experience. Below is a scatter plot of daily price changes for GBTC and SPY.

It may be hard to see but one-day 10% moves up or down are much greater for GBTC than SPY (84 days vs. 5 days). The worst day ever for GBTC was down 49% versus down 11% for SPY.

By definition, since nothing underlies crypto, it is a pure gamble. 

Further, bitcoin and almost ALL crypto exist in a digital anonymous blockchain. Anonymity or “trustless value” is its major calling card and there’s the rub. Bitcoin deliberately has no “know your customer” (KYC). 

KYC is the basis of modern finance and every financial institution including every casino (except bitcoin). KYC is a fundamental tenant of AML or anti-money laundering. With no KYC, bitcoin has unprecedented availability to and demand from money laundering, drug dealing and terrorism. This accounts for its fantastic rise in the marketplace. Many have called for outlawing bitcoin. Unlike legal porn (another source of outrageous return) which is shamed out of commerce, bitcoin has no shame, so far. 

Ok, so if you own it, know WHAT you own!

Note while bitcoin derivatives HAVE KYC, the underlying still doesn’t. The wrappers don’t help. And while there is much work on decoding the blockchain (kind of like decoding DNA) this will be slow to end crypto’s anonymity and source of enormous demand.